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The average monthly transacting users on Paytm jumped by 39% from a year ago.
On Monday, November 7, Indian fintech firm Paytm reported its Q2 2023 results with a 76% jump in revenue. The recent jump in revenue comes amid strong growth in its loan book.
Paytm in Fiscal Q2 2023
For the second quarter, One 97 Communications, the parent firm of Paytm reported a total revenue of Rs 1,914 crore. In their earnings call, Paytm said that the growth in revenue comes from an ‘increase in merchant subscription revenues, growth in bill payments due to growing MTU (monthly transacting users) and growth in disbursements of loans through our platform’.
However, during the July-September quarter, the company’s net loss widened to Rs 571.5 crore, from Rs 473.5 crore in the same quarter of the last year. Listed last year in 2021, the Paytm (NSE: PAYTM) stock price is trading at a 70% discount from its listing day.
The widening of the losses happened due to the rising expenses related to employee benefits and payment processing charges. The revenue during Q2 was also 88.5% less than what Paytm posted during the first quarter of this financial year. However, the company’s net payments margins have improved by 15% to Rs 443 crore from the previous quarter. Also, the average monthly transacting users on Paytm jumped by 39% from a year ago.
Paytm Payments Bank
The Indian fintech firm Paytm has also been working on its native payments bank. But its banking ambitions came to a hiatus after the Indian central bank issued a ban earlier in March. Commenting on the same, it said that they don’t have a firm “timeline” on when it will resume onboarding new customers to the platform.
Paytm said that the central bank’s observations have been largely around IT outsourcing processes and operational risk management. Paytm said that RBI’s decision doesn’t have any material impact on its overall business. It added:
“The bank management is in the process of responding back to the RBI and will wait for further discussions / directions from the regulator. The bank management continues to accord highest focus and sustained prioritization of its resources towards solving all concerns, and ensuring that it is fully compliant in letter and spirit.”
Last month on October 25, the Paytm bank also received an IT audit report from the RBI. It added:
“The (Paytm Payments) Bank is in the process of evaluating the impact of this report to respond to the Reserve Bank of India which is due on November 15, 2022. However, management is reasonably certain that there will not be any material financial impact of such report on the financial results of the bank for the quarter and half year ended September 30, 2022.”
Although the company has been suffering major losses and bleeding money, it is confident of turning profitable by September 2023.